CCA CCA Cost Accounting & Management 2

Question 1

Which cost behavior pattern remains constant in total regardless of changes in activity level within the relevant range?

Accepted Answer

Fixed cost

Answer

Fixed costs do not change in total with activity level within the relevant range, though per-unit fixed costs decrease as volume increases.

Question 2

The contribution margin ratio is calculated as:

Accepted Answer

Contribution Margin ÷ Sales

Answer

The contribution margin ratio equals contribution margin (Sales minus variable costs) divided by sales, showing what percentage of each dollar contributes to covering fixed costs and profit.

Question 3

A manufacturer uses process costing. What does the concept of 'equivalent units' represent?

Accepted Answer

The conversion of partially completed units into a whole-unit equivalent

Answer

Equivalent units convert partially completed units into their equivalent in fully completed units to allocate costs accurately in process costing.

Question 4

Which of the following best describes a sunk cost?

Accepted Answer

A cost already incurred that cannot be recovered

Answer

Sunk costs are historical costs that have already been incurred and are irrelevant for future decision-making.

Question 5

In a standard costing system, the labor efficiency variance is calculated as:

Accepted Answer

(Actual hours – Standard hours) × Standard rate

Answer

Labor efficiency variance measures the difference between actual hours worked and standard hours allowed, multiplied by the standard labor rate.

(CCA) Certified Corporate Accountant Practice Test

(CCA) Certified Corporate Accountant Practice Test

CCA CCA Cost Accounting & Management 2